MCF makes cuts, needs funds

With funding to last until Sept., facility goes to county

MANISTIQUE – A 7.5 percent wage cut is being considered by the Schoolcraft County Medical Care Facility as it attempts to deal with a “grave financial problem” threatening to close its doors. The cut, along with a plethora of information regarding the facility’s financial status was divulged during Tuesday’s meeting of the Schoolcraft County Board of Commissioners.

Last month, the MCF administrator, Jerry Hubbard, approached Commissioner Dan LaFoille requesting the county’s assistance with what he deemed a “cash flow” problem. Recently, the facility provided the county’s finance committee with the documents need ed to explore its options – including possible financial assistance from the county.

According to LaFoille, after reviewing the documents, it became clear the facility has consistently had expenditures higher than revenues since 2010. He noted that the Schoolcraft County treasurer, Julie Roscioli, had approached Hubbard about the situation several times.

Since Hubbard’s initial contact with LaFoille, the county board has voted to allow the finance committee to explore options in regard to the facility.

“Initially, we were told that the medical care facility could be out of money as soon as August,” he said. “We’re still not quite sure about the timing of that because of state payments, as well as some other issues.”

LaFoille noted that everyone realizes that timing is an issue, and that the board will need to move forward as quickly as possible.

“This short notice and seriousness of the financial situation at the facility makes any viable solution very difficult,” he said. “We understand, totally, that we’re in a bit of pinch here, and that we have to take some actions.”

According to documents supplied by the MCF, the facility: lost approximately $700,000 in cash in 2010; over $1,000,000 in the fiscal year 2011; and approximately $400,000 so far this fiscal year.

Hubbard, in an effort to clarify the facility’s financial position, spoke Tuesday about his history as administrator at the MCF.

“I kind of stepped into a hornet’s nest when I came here – I understood that when I took the job,” he said. “I came into a situation where the accounting hadn’t been done for several months.”

According to Hubbard the former office manager had walked out prior to his arrival, leaving a number of issues for him to tackle, including open contracts with union employees and pending arbitration. Since his arrival, Hubbard said he has: negotiated a wage freeze for 2010; negotiated a 2.75 percent wage increase in 2011; negotiated another wage freeze in 2012; instituted a 1 percent wage increase and $200 bonus for employees in 2013; and made changes to the Municipal Employees’ Retirement System plan for the facility – increasing the employee contribution and moving new hires to a hybrid plan.

Hubbard noted that this year’s wage increase was made, “prior to our running into issues.”

Despite his steps to save the facility money, Hubbard said that retroactive payments to MERS, arbitration, construction costs, stalled payments from MIPS, and a declining census contributed to the facility’s financial hardship.

“We put lots of cuts in place – we didn’t just ignore the issue or pretend it wasn’t happening,” he said.

Hubbard noted that vacated positions for five CNAs, one licensed nurse, and one other staffer – all full time employees – were not filled in order to save money. In May of this year, Hubbard said more actions needed to be taken, so two CNA positions were cut, along with one full time chef, one social worker, a RN in-service coordinator, and the restorative nursing program. Reductions to one office position, maintenance, housekeeping, and activities were also made.

“Our last big piece of the puzzle to get our expenses in line with our revenue is a 7.5 percent, across the board, wage reduction,” he said. “This is the most unpleasant of the cuts, but I believe that we need to do it.”

Hubbard explained that the wage decrease is being implemented to avoid further layoffs, especially since the facility has just the right amount of staff at the moment.

“You can’t just eliminate your whole staff,” he said. “You have to have enough staff there to meet your minimum staffing requirements and to properly care for the elders in our community – which they deserve.”

The shift and decline in the facility’s census is the main reason for the facility’s financial troubles, Hubbard explained. The number of patients participating in the Medicare Part A program, the facility’s biggest money maker, has decreased from 15 to one.

“When the new hospital opened, our Medicare census … has essentially dried up,” he said. “The reimbursement for those services is substantially higher.”

The MIPS program didn’t register the increase in Medicaid patients, since they base their reimbursements on past census data, so the facility is currently underpaid approximately $223,000. Despite his attempts, Hubbard said the state seems uninterested in an interim reconciliation. However, a payment from the April 30 reconciliation, approximately $80,000, will be received by the facility on July 25.

“It kicks the can a little bit,” Hubbard said. “At some point, we’re going to need assistance if we’re going to be able to meet our payroll … and pay our vendors.”

While the facility will be exiting the MIPS program on Oct. 1 to enter a more stabile payment program, Hubbard said it will be mid-November before any regular payments start coming through.

LaFoille noted that, by the finance committee’s estimates, this means the facility will start running out of money in September.

“Somehow we have to find a way to sustain things until November at the earliest, and that’s assuming quite a bit,” he said.

The facility’s board is currently considering asking county residents to approve a millage in November.

“We’re still discussing what that millage would be, trying to identify the numbers necessary to help us sustain the facility for the long term,” LaFoille said.

He noted that, in order to assist the facility from September into November, the county will likely run through the funds it has saved over the past four years.

Chairperson Al Grimm asked several questions of Hubbard, beginning with what happened to the $1,000,000 in capital investment fund. Hubbard answered that there had been 20 people in the locked Alzheimer’s unit, which was too small for them to be “safe”.

“With hindsight, no, I would not have talked about that,” he said.

Hubbard explained he had worked in the past as an administrative assistant and controller at another facility, and that he, an office manager, secretary, a part time medical records/accounts person, and personnel person currently make up the administration at the facility.

“No,” Hubbard answered. “She has an understanding of it, but she’s not qualified to do the financing.”

Rumors about the facility not accepting veterans or patients on the weekend have been spreading around the community, Grimm said.

Hubbard denied this claim, noting the facility needs any incoming patient’s information by 2 p.m. on Friday. As for the other claim, Hubbard said he can think of only one instance in which a veteran was denied.

“We are privy to the medical record and we are privy to the needs of that person, and we have to make a decision whether we can take care of them or not,” he said. “Once we take somebody – we got them.”

Commissioner Craig Reiter explained he had contacted medical care facilities in both Munising and Marquette and they conceded that Schoolcraft’s facility has been difficult to work with.

“There’s obviously bad blood out there, and, usually, that gets spread much easier than good news, so the image has got to change,” Commissioner Jerry Zellar said.

Nancy Demers, whose husband serves on the MCF board, offered positive comments about the facility, noting both her parents were in the facility at one point.

“I’ve never had an issue,” she said. “We’ve never had a complaint – meals are good, activities are excellent, the staff is there to respond, the cleanliness is excellent.

I’ve been disheartened by the community rumors,” she added.

Krystal Goudreau, a former employee of the MCF said that she has seen its problems first-hand, and has even had her own family members denied entry to the facility because they were deemed “fall risks”.

“Anyone over 85 with multiple diagnoses is a fall risk, so who are you going to put into a nursing home who is not a fall risk?” she said.

Goudreau noted the facility’s lack of a nearby doctor for quick admittance of patients could be remedied by working with Schoolcraft Memorial Hospital. She also questioned the facility’s move to cut CNA positions, since they would be the staff providing services to patients and allow more to be admitted.

“The 7.5 percent wage cuts would be, for CNAs who are making $13 an hour – a lot of them are single moms, with kids at home, that pay all their bills by themselves – how are they going to survive on 7 percent less per hour versus the administration?” she said. “If you’re going to cut at all, and you want to offer good patient care, it should be probably be at the top, where paper is being pushed and not at direct patient care levels.”

Ray, the office manager, defended the facility.

“It’s very challenging to have people who, on the outside, look at the medical care facility and try to diminish it, when it provides such a wonderful service to our people in this county,” she said.

Dixie Anderson, a MCF board member, praised the facility’s employees.

“The cuts don’t settle well with anybody,” she said. “The CNAs, and the nurses and the housekeepers … these people are wonderful.”

Currently, the facility has 80 – 90 union employees, and just under 120 overall. La- Foille said work would continue on finding solutions to save the facility from going under.

“Everybody’s nervous about what’s going to happen and how and when,” he said.

LaFoille made a motion to have the Schoolcraft County Prosecutor Tim Noble request the Michigan Attorney General’s opinion on what the county’s legal responsibilities are to the facility.

Zellar supported the motion, adding, “We scrimped and saved and cut and fired and laid off and benefits gone for years; it could be gone in a payroll.”